November 2022
22Nov

US. How many retire with one million dollars?

Saving $1 million (or more) for retirement is a great goal to have. Putting that much aside could make it easier to live your preferred lifestyle when you retire, without having to worry about running short of money. However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved. If you’re looking to be...

November 22, 2022
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October 2022
14Oct

Bounded Rationality and Optimal Retirement Age

By Hyeon Park This paper explores a lifecycle model of labor supply and endogenous retirement behavior for households whose planning window is truncated and who will reoptimize as extra information on productivity is revealed over time. This short horizon model internalizes the restriction on rationality for temporal resource allocation and the labor supply is closely dependent on the degree of productivity changes in view. With the model, the endogenous retirement timing---the moment at which the marginal utility from the intended...

October 14, 2022
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06Oct

US. Retirement Planning: There’s A Wide Gap Between Expectations And Reality

There’s a significant perception/reality gap among most pre-retirees and retirees today. That’s one of the key takeaways from a new study published by the Stanford Center on Longevity (SCL), titled Disconnected: Reality vs. Perception in Retirement Planning. The study shows that most of today’s pre-retirees and retirees lack sufficient savings to fully retire at age 65 and that generally, they’re not financially prepared for retirement. Yet they hold unrealistic financial expectations for their retirement years, and they’re not taking steps...

October 6, 2022
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05Oct

US. 5 Ways Inflation is Changing Retirement Planning

GOBankingRates survey finds 3 in 4 Americans say inflation is impacting how they save and plan for retirement. Here’s what they’re doing A recent GOBankingRates survey of nearly 1,000 Americans found that nearly three-quarters (73.5%) say inflation is affecting their retirement plans in some way, from how they invest to when they plan to retire. Per the survey, here are five significant ways inflation is changing how people are saving and planning for retirement. Saving more The most common response to inflation when...

October 5, 2022
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September 2022
30Sep

Nudges and Networks: How to Use Behavioural Economics to Improve the Life Cycle Savings-Consumption Balance

By David Blake Many people find it difficult to start and maintain a retirement savings plan. We show how nudges can be used both to encourage people to save enough to provide an acceptable standard of living in retirement and to draw down their accumulated pension fund to maximize retirement spending, without the risk of either running out of money or leaving unintended bequests. Networks can help too, particularly employer-based networks. However, the nudges and networks are more likely to...

September 30, 2022
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28Sep

How To Retire During A Bear Market

Imagine retiring in this market. A 60-year-old who owns a balanced fund—60% allocated to stocks, 40% to bonds—has seen the value of their investment drop by 18% so far this year. Soaring prices only makes matters worse. Not only does our 60-year-old have less wealth, but also their savings don’t buy what they used to. In fact, financial advisors say their clients have been more preoccupied with gas and food prices than the terrible stock market. “Inflation is the biggest issue...

September 28, 2022
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23Sep

US. How To Help Protect Your Savings From Inflation When You’re Planning For Retirement

With some careful planning, you can mitigate the impact of inflation on your retirement savings. As inflation rises, many preretirees are wondering how they can ensure that their retirement savings will cover their cost of living in the future. For investors who are planning for retirement, the good news is they still have time to make any necessary adjustments. They may even find the plan they have in place is already sufficient to mitigate the impact of inflation. How inflation affects...

September 23, 2022
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14Sep

Financial Wellness Meets Behavioral Economics

By Shlomo Benartzi Helping Participants See the Big Picture and Act on It The financial lives of American workers have become increasingly complicated in the 21st century. Instead of relying on an employer pension, most workers now save on their own, a shift that brings both opportunities and challenges. In addition, workers have to effectively allocate these savings across different financial products and accounts. Should they fund their 401(k) account or emergency savings account? Should they choose a high-deductible health...

September 14, 2022
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13Sep

U.S. This is how much Social Security benefits are likely to rise next year

By Brett Arends Social Security beneficiaries could be looking at a very welcome bump of 8.7% in their benefits starting in January next year, if current trends continue. That hike would be the biggest since 1981, and would be worth an extra $144 a month for a retiree on the average monthly benefit of $1,656. These numbers are the latest projection from the Senior Citizens League, a nonprofit, and are based on the government’s inflation data over recent months. These are only projections,...

September 13, 2022
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09Sep

Are Retirement Planning Tools Substitutes or Complements to Financial Capability?

By Gopi Shah Goda, Matthew Levy, Colleen Flaherty Manchester, Aaron Sojourner, Joshua Tasoff, Jiusi Xiao We conducted a randomized controlled trial to understand how a web-based retirement saving calculator affects workers’ retirement-savings decisions. In both conditions, the calculator projected workers’ retirement income goal. In the treatment condition, it additionally projected retirement income based on defined-contribution savings, prominently displayed the gap between projected goal and actual retirement income, and allowed users to interactively explore how alternative, future contribution choices would affect...

September 9, 2022
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